Obama to propose $1.5T in new tax revenue

President Barack Obama’s proposal to reduce long-term deficits with $1.5 trillion in new taxes is less an opening bid in a negotiation than it is an opening salvo in a struggle to draw sharp contrasts with congressional Republicans.

Obama’s proposal is aimed predominantly at the wealthy and comes just days after House Speaker John Boehner ruled out tax increases to lower deficits. It also comes amid a clamor in his own Democratic Party for Obama to take a tougher stance against Republicans. And while the plan stands little chance of passing Congress, its populist pitch is one that the White House believes the public can support.

The core of the president’s plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.

The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. He’s submitting his deficit fighting plan to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.

In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren’t paired with tax increases on upper-income people.

Officials cast Obama’s plan as his vision for deficit reduction, and distinguished it from the negotiations he had with Boehner in July as Obama sought to avoid a government default.

As a result, it includes no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.

Moreover, the new tax revenue Obama is seeking is nearly double the $800 billion that Boehner had been willing to consider in July. Republicans were already lining up against the president’s tax proposal before they even knew the magnitude of what he intended to recommend.

“Class warfare may make for really good politics but it makes for rotten economics,” GOP Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman, said Sunday in reaction to one Obama tax proposal to impose a minimum tax rate on wealthy filers.

Former President Bill Clinton on Monday dismissed GOP claims that the tax on the wealthy would discourage jobs creation and hamper economic growth.

“Republicans in Washington always say the same thing,” Clinton said on NBC’s “Today” show. He called their argument an insult to wealthy Americans, including many who don’t mind paying more.

Key features of Obama’s plan, as described by senior administration officials Sunday evening:

—$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

—$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.

—$430 billion in savings from lower interest payment on the national debt.

One comment

More class warfare (redistribution of wealth) from this Socialist president, but to be expected. It would be enlightening to see exactly how much this “Tax the Rich” plan of his will reduce the deficit by. I estimate very little. However it does play to his ignorant base and makes for good political fodder on his lame stream media networks… since he doesn’t have much else to offer.

It would also be interesting to see a “detailed breakdown” of all these “savings” he’s proposing, but that may never see the light of day in this “transparent” administration until forced to, and then you will see more fuzzy math.

Did you ever wonder why it took over 2-1/2 years for this administration to realize that we had an unemployment problem in this country? But he certainly found the time (and money) to pass his ideological issues, such as Obamacare. Can’t wait ’til the 2012 elections!